How to make objects in the scene become physically smaller the further they are from the camera?
You can do this by drivers.


Right click on Scale X property and Add Driver > Manually Create Later (Single).


Go to Graph Editor and switch to Drivers mode.
Draw a line like this: (this line will show dependence between distance and scale)


In Drivers tab change value to distance, select both objects in Object 1 and Object 2 inputs and swich Type to Averaged value


Update Dependencies. You will see that x-scale now depends of distance between objects:


Finally copy y and z scale from x. Paste #self.scale.x in Scale Y and Z


To makes this work, you need to enable Use self in Drivers tab on Scale Y and Z channels.


Update Dependencies.